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Spain: Bankia Down, Who Is Next?

Tyler Durden's picture


Bankia is done: at this point the only questions left are i) what will be the final bailout cost  ii) who will pay for these costs, and iii) whether the bank has enough beach towels to satisfy the onslaught of manic Spaniards desperate to hand over their €300 euros to the insolvent bank in exchange for some Spiderman-embossed linen. Oh, there is one more question: who is next.

Now, as we showed earlier today, in the aggregate the answer is simple: everyone. Because as JPM said "if a Spanish EU/IMF bailout package covered the government’s gross funding needs through the end of 2014, and included €75bn for bank recapitalisation, then it would amount to around €350bn." At roughly a third of its GDP, this is, needless to say, more money than Spain can procure. But, in a very Stalinesque sense, where everyone is merely a statistic, that is essentially the same as saying no one.  It is also certainly not helpful to any Spanish readers who may be worried about their deposits (and investments) which in a world of total disinformation, will first be lost before the government advises caution and safety. So instead we go to Goldman Sachs which has conveniently constructed the following analysis, which replicated the loss provision calculation of Bankia, and applies it to the other listed banks. The result: in addition to the €19 billion in bail out costs for Bankia, Spain will need to spend at least another €25 in bailout funding for six other listed banks which include CaixaBank SA, Banco Santander, Banco Popular Espanol, BBVA, Banco Espanol de Credito SA, Bankinter SA.

So now we are not dealing with mere "statistics."

The capital need breakdown is as follows: "Pro-forma capital gap assuming 9.5% CT1 hurdle rate, loss estimates comparable
to those outlined by BKIA and front-loaded in 1H12"

And in the grand scheme of things:

And some pretty Appendix slides as well as the math behing the analysis:

Calculation of residual losses and capital needs under BFA-Bankia scenario

We outline our analysis of residual losses and capital needs for eight listed banks in Spain, assuming a level of loan losses broadly
in line with the scenario presented by BFA-Bankia in their recapitalization plan. We show capital below and above the 9.5% CT
hurdle used by the entity assuming both full front loading of losses in 1H12 as well as taking into account 2-year credit buffers.

Residual losses: Similar to our estimates after RDL-2 is put in place

Retained earnings, loss absorption, and capital: Higher hurdle and elimination of PPP are key

We show the analysis on cumulative and expected losses for the top eight banks in Exhibit 10. These losses are calculated based on the assumptions laid out in our note Still very difficult but manageable for internationals, April 20, 2012. In our view, RDL-1 and RDL-2 adequately address loss on real-estate exposures. The market focus is now shifting to residual losses embedded in other portions of the book. We lay them out in the analysis below, but note that it is not our view that these losses should be capitalized for today. We expect them to be met largely through pre-provision profits and do not believe they should be used as a benchmark for potential capital shortfalls.


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Wed, 05/30/2012 - 18:46 | Link to Comment SilverTree
SilverTree's picture


Wed, 05/30/2012 - 19:03 | Link to Comment Matt
Wed, 05/30/2012 - 19:32 | Link to Comment Soul Train
Soul Train's picture

I prefer Thai. I pass on the Chinese. This is true with regard to the females, the food, etc.

Same with music and dance.


Wed, 05/30/2012 - 22:02 | Link to Comment Manthong
Manthong's picture

YoYo Mao

(the kid's amazing)

Wed, 05/30/2012 - 22:17 | Link to Comment palmereldritch
palmereldritch's picture


Nice to see AnAnonymous kickin' back for a change!

Wed, 05/30/2012 - 22:14 | Link to Comment Flying Tiger Comics
Flying Tiger Comics's picture

My Thai girlfriend told me that having a small penis won't hurt our relationship.


I still wish she didn't have one.

Thu, 05/31/2012 - 00:07 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Now THAT is funny.

Wed, 05/30/2012 - 19:14 | Link to Comment LeonardoFibonacci
LeonardoFibonacci's picture

The greedy elitist of Europe are free to swindle public funds à la Rothschild.  Under an Adolf Hitler, this would of never  have happened as Hitler knew that money was being controlled by elitist zionists.  He took over the economy and got rid of those dirty rotten scoundrels.  The rise of another Reich is not too far off.

Wed, 05/30/2012 - 19:52 | Link to Comment marxist
marxist's picture

I hate to rain on your party, but Hitler was a corporate stooge cut from the same cloth as Blair and "social democrats" generally. He simply added racism to the mix, which of course was handy for his elite buddies in a Germany weighed under with costs and looking for the next best thing in cheap labour, slaves. He took a little bit of Marxism (a little bit does not socialism make), added that to the perilous state of Depression era capitalism and of course, gave bosses the sorts of perks and subsidies they always turn to when out of pocket.

Wed, 05/30/2012 - 21:37 | Link to Comment GOSPLAN HERO
GOSPLAN HERO's picture

"We are socialists, we are enemies of today's capitalistic economic system for the exploitation of the economically weak, with its unfair salaries, with its unseemly evaluation of a human being according to wealth and property instead of responsibility and performance, and we are all determined to destroy this system under all conditions"  -- A. Hitler

Wed, 05/30/2012 - 22:23 | Link to Comment palmereldritch
palmereldritch's picture

Funny how they can always find a fresh stooge to spew a bad speech penned somewhere in the bowels of London's the City and carry the flag for the latest Ism they've concocted.

I believe for Today's Special they're serving re-fried Anarchism...


Wed, 05/30/2012 - 22:09 | Link to Comment LeonardoFibonacci
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A corporate stooge does not clean up his economy, create a massive war machine & send people to the slaughterhouse to clean up the national & regional economies!  Please folks do not come up with Bush.  Hitler improved the German economy while Bush pulverized the US economy.  The rise of the Nazi party belief will be inevitable under the present turmoil of Europe. 


Some of you will be offended by what i wrote, but you'll see that our world will soon be in total chaos.

Thu, 05/31/2012 - 00:26 | Link to Comment A Nanny Moose
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" rid of those dirty rotten scoundrels."

Why is the cork on the fork?

Wed, 05/30/2012 - 23:25 | Link to Comment Buck Johnson
Buck Johnson's picture

This is a slow moving trainwreck that is getting faster and faster as the weeks go by.

Thu, 05/31/2012 - 00:27 | Link to Comment A Nanny Moose
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Wed, 05/30/2012 - 18:55 | Link to Comment hedgeless_horseman
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Bad omen.

New BBVA Stadium?  Did not work so well for Enron Field in Houston.  

Wed, 05/30/2012 - 18:55 | Link to Comment Stackers
Stackers's picture

Thats a really pretty stadium with zero parking right in the middle of this lovely run down bum infested wharehouse district in downtown Houston. you'll be seeing groups of people out front drawing straws to see who gets to go get the car in some dark alley in zombieland

Wed, 05/30/2012 - 19:11 | Link to Comment Soul Train
Soul Train's picture

Not a big fan of soccer. But if I was, I'd rather just watch the sport on TV, and pop open my own cold beer with smoked almonds, right there on my big sofa and air conditioner nearby.

No need to pay ridiculous cartel priced warm beer and piss ant high dollar peanuts at a stadium.

Got HDTV. What else does a guy need???

BTW, who's financing the stadium deal? Last time I was in Houston, I payed a fortune in "special stadium taxes" assessed for my rental car and hotel. I guess the joke is on me, business guys like me pay for their stadium. Raw deal.

Wed, 05/30/2012 - 19:00 | Link to Comment BeetleBailey
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Wonder how much they paid for the naming rights - and for how long?

Wed, 05/30/2012 - 19:04 | Link to Comment Comay Mierda
Comay Mierda's picture

deposits hard at work

Wed, 05/30/2012 - 19:05 | Link to Comment Michael
Michael's picture

I stocked up on popcorn over the past weekend.
I'm still worried I might run out.

Wed, 05/30/2012 - 19:18 | Link to Comment THX 1178
THX 1178's picture

You're not eating it yet are you?

Wed, 05/30/2012 - 19:18 | Link to Comment yabyum
yabyum's picture

Looks more  like thunder dome. Banka rule Barter Town!!

Wed, 05/30/2012 - 18:51 | Link to Comment Go Tribe
Go Tribe's picture

Goldman, eh? You gotta be kidding.

Wed, 05/30/2012 - 18:52 | Link to Comment Stackers
Stackers's picture

Let's Party like its 2008 !!!!!!!!!!!!

Wed, 05/30/2012 - 18:53 | Link to Comment A Lunatic
A Lunatic's picture

Columbus must be rolling over in his grave.

Wed, 05/30/2012 - 18:56 | Link to Comment palmereldritch
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Wed, 05/30/2012 - 18:59 | Link to Comment Yen Cross
Yen Cross's picture

 That's a no brainer Tyler. Ref; "Oh, there is one more question: who is next."   "The European Banking Cartel of  OUZO" ! ( Oversold Unregulated Zealots in Oblivion )...

Wed, 05/30/2012 - 19:01 | Link to Comment papaswamp
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Spains banks are leveraged 70 to 1....they ain't coming back from this.

Wed, 05/30/2012 - 19:20 | Link to Comment mammoth mo
mammoth mo's picture

Nor should they.  The talking heads keep beating the drum on you can't let it fail - but it will fail anyway and it should.

Wed, 05/30/2012 - 19:01 | Link to Comment The Alarmist
The Alarmist's picture

Santander is big in the UK, so to keep things interesting, let's screw with the Brits the same way the Icelandic banks did.

Wed, 05/30/2012 - 19:03 | Link to Comment Go Tribe
Go Tribe's picture

That would be the Merkel / Goldman way.

Wed, 05/30/2012 - 19:19 | Link to Comment Gazooks
Gazooks's picture

curse de la Maya, Inca, Caribe. No mas Pizarro-bro-oro, bitchez

Wed, 05/30/2012 - 22:53 | Link to Comment monoloco
monoloco's picture

Santander is very big in Mexico and South America as well, it's hard to consider them a Spanish bank.

Wed, 05/30/2012 - 19:03 | Link to Comment Comay Mierda
Comay Mierda's picture

Spain will need to spend at least another €25 in bailout funding

don't worry, the ecb says private investors will provide the cash

my check is in the mail

...ok i couldnt type that with a straight face

Wed, 05/30/2012 - 19:09 | Link to Comment xtop23
xtop23's picture

Spain ain't Japan. They're fucked.

Wed, 05/30/2012 - 19:07 | Link to Comment Taterboy
Taterboy's picture

Not to worry. I called over to Bankia and they said they had plenty of Spidy towels left and expecting more any day from China.

Wed, 05/30/2012 - 21:46 | Link to Comment jmc8888
jmc8888's picture

Marvel at where your deposits go!


Wed, 05/30/2012 - 19:09 | Link to Comment XtraBullish
XtraBullish's picture

Watch for the Creation of "Banco Reserva Federales de Eurozonia" complete with Timeo Geithnerino and Benjamino Barnankifucco and five seventeen-tonne printing presses delivered to their doorstep within a few days.

Wed, 05/30/2012 - 19:37 | Link to Comment Go Tribe
Go Tribe's picture

You got that right. They will bail it. It's odd reading all the Greece and Spain trashing. When our banks were caught with their belts around their ankles and their hands full, it was bail, bail, bail. Now it's "Sorry world, we got ours and you're not getting yours but give us your gold and assets." Buncha wound-up bastards from Berlin telling everyone to get in the boxcars again. All covered by lies like that last big time.

Wed, 05/30/2012 - 20:23 | Link to Comment xtop23
xtop23's picture

In 2008 interest rates weren't at zero ( negative ).

AAA credit ratings, no matter how undeserved, still allowed sovereigns and banks to borrow cheaply.

The tools used during the financial panic aren't available now.

As an added bonus, populations are starting to catch on to the game and pull their chips off of the table.

It's always the same until it isn't.


Wed, 05/30/2012 - 21:06 | Link to Comment Lednbrass
Lednbrass's picture

What? So instead the Germans should just fork over for a bunch of idiots in Greece, Spain, then Ireland and Portugal, then Italy for no particular reason?

Christ, another American idiot whose sense of history was formed by the Disney Channel and Nickelodeon. You are a moron.

Wed, 05/30/2012 - 21:13 | Link to Comment xtop23
xtop23's picture

Oh the Germans will do it, but they'll want iron clad assurance that they'll get the receiving country's yellow and shiny for the trouble.

How many tons are in play in Europe..... 3200?

Wed, 05/30/2012 - 19:10 | Link to Comment Yen Cross
Yen Cross's picture

 I would be really careful being short right now. Last day of the month rebalancing, and one headline will blow the stops up big time! Look @ that blip "last night" in the markets, during the middle of European trading! That blew some big stops for sure!

 The train /boat is starting to look overweighted. The eur/usd is more over sold than it was in Oct. 08 Technically!

  I'm not calling trades here, but I remember that nasty short squeeze last year, and the year before!



Wed, 05/30/2012 - 19:21 | Link to Comment Soul Train
Soul Train's picture

maybe, and maybe not. Your viewpoint seems to be the consensus. So we'll see.

I will say this. JPM and MS continue to dog, barfing in a shitty looking downtrend below their 200 sma. Industrial bellweathers like CAT and MMM are also looking quesy.

A black swan event can take this market either direction. The crowd is expecting the FED to backstop this trainwreck immediately.

My choice: buy physical silver and gold. With regard to ES, this is the most FED manipulated BS market that the world has ever seen. It amazes me that JPM and MS aren't participating, given they have the inside. Just shows how incompetent those brainiac crooks are.


Wed, 05/30/2012 - 19:34 | Link to Comment Yen Cross
Yen Cross's picture

 Thanks for your comment, Soul Train.  

   Being long P/M's is the best of both worlds. Inflation/Fear.

Thu, 05/31/2012 - 00:01 | Link to Comment GMadScientist
GMadScientist's picture

You, sir, got yer head on straight.

Wed, 05/30/2012 - 19:12 | Link to Comment Rubicon
Rubicon's picture

Germans like towels

Wed, 05/30/2012 - 20:59 | Link to Comment SoCalBusted
SoCalBusted's picture

yes, print more towels and hand them to the Germans during the upcoming August holiday season (in exchange for EUR, DM or Au?)

Wed, 05/30/2012 - 22:31 | Link to Comment palmereldritch
palmereldritch's picture

Wait for the looks on their faces when they realize all those deck chairs they bogarted in the early morning with their Spidey towels are actually located in [on the] Lusitania

Wed, 05/30/2012 - 19:16 | Link to Comment SheepDog-One
SheepDog-One's picture

At least someone in congress is fed the hell up over this stupid damn clownshow Illinois rep EXPLODES on the House floor! IT's ALL FALLING APART... - YouTube

Wed, 05/30/2012 - 19:59 | Link to Comment worbsid
worbsid's picture

Most excellent rant but look at the people around him ... duh.

Wed, 05/30/2012 - 19:17 | Link to Comment General Debility
General Debility's picture


I wanted to see some Spaniards throwing in the spiderman towel and all i got was these lousy charts:(

This story is rather Banzaiesque... Hope he picks up the towel and runs with it.

Wed, 05/30/2012 - 19:18 | Link to Comment Piranhanoia
Piranhanoia's picture

Las cosas minisculos;  (translation to english)   Your Spiderman towel has a remote sensor and microphone so that we can listen in at selected times to see if you are considering taking your money out of the bank again.  Or whatever else you are doing.  Franco.

Wed, 05/30/2012 - 19:18 | Link to Comment Snakeeyes
Snakeeyes's picture

Most Spanish banks have big housing exposure, so see which one has the biggest exposure. Santander mercifully didn't, but the other banks do.

Wed, 05/30/2012 - 20:21 | Link to Comment youngman
youngman's picture

all these numbers you are making your decisions on and graphs with.....are not up to date....probably not marked to market....and also probably total what looks sick now...was actually dead months ago...

Wed, 05/30/2012 - 20:44 | Link to Comment disabledvet
disabledvet's picture

methinks the problems with the banks is miniscule relative to the problems with the State itself.

Wed, 05/30/2012 - 21:32 | Link to Comment Freewheelin Franklin
Freewheelin Franklin's picture

Instead of Spiderman Towels they should have given away Dick Towels.

Wed, 05/30/2012 - 21:33 | Link to Comment Freewheelin Franklin
Freewheelin Franklin's picture

In case you are wondering

Thu, 05/31/2012 - 00:03 | Link to Comment GMadScientist
GMadScientist's picture

Angela Merkel crackwipes.

Wed, 05/30/2012 - 21:42 | Link to Comment michaelsmith_9
michaelsmith_9's picture

Forex is typically a leading indicator of equities, especially risk-related currencies. The AUDJPY continues to drop to lower levels swiftly and is in a well-defined downward Elliott Wave channel. AUDJPY price action should continue lower in the near-term, which means that equities are getting ready to make a plunge tomorrow. Longer-term the AUDJPY is suggesting major weakness is ahead for equities.

Thu, 05/31/2012 - 00:06 | Link to Comment GMadScientist
GMadScientist's picture

Please stop staring at the waves and pay more attention to the guy rhythmically moving the side of the tub before it's too late.

Wed, 05/30/2012 - 23:53 | Link to Comment q99x2
q99x2's picture

Everyone. Holy hoppin crawdad. That means me.

Thu, 05/31/2012 - 03:50 | Link to Comment Alejandrito
Thu, 05/31/2012 - 03:53 | Link to Comment cnhedge2
cnhedge2's picture

Euro Area Debt: The Path to Redemption

Thu, 05/31/2012 - 06:28 | Link to Comment Alejandrito
Thu, 05/31/2012 - 06:41 | Link to Comment Zero Govt
Zero Govt's picture

i love all these reports from Goldmans and JP Morgan on European Banks and their insolvency situation

what next, a "rumour" from Reuters or Bloomberg to complete the 1-2 punch

all good solid stuff from these folks, ZH has become a Clearing House for this garbage

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